by Coll, Steve;
“I can’t imagine anybody acting without having thoroughly investigated all of the things that you’ve mentioned,” Liedtke declared. “I would think that the top management of the company would have examined those documents—each of them themselves and each one of them having done it. People don’t get that place in a corporation without doing their homework.”
“Would you as an oil executive, acting responsibly, have gone forward to make a contract with someone if you had not reviewed all of these things?”
“No, of course not.”
“Why wouldn’t you?”
“Mr. Jamail, I would consider that about as arrogant and unethical a thing to do as I can possibly imagine.”
Dick Miller’s cross examination of Liedtke was fiercely determined—it was his most passionate examination of the entire trial. It was characteristic of Miller, who measured men by their inner drive, their warrior spirit, that he thought of Hugh Liedtke as the soul of Pennzoil v. Texaco. In preparing for Jamail’s affirmative case, Miller had asked himself this: Who is responsible for bringing this case? Who has the strength of personality to bring this case and resist settlement? Who’s ego is sustaining this case? It was certainly not the mild-mannered Baine Kerr, Pennzoil’s president, Miller thought. It was not Baker & Botts. It was not Jamail. The answer, Miller believed, was Hugh Liedtke.
During his decades-long career at Baker & Botts, Miller had never worked closely with Liedtke, but since Pennzoil was a major client of his firm, he had seen the chairman up close. Miller felt that he knew Hugh Liedtke, the way a hunter knows his game. From his experience and his peculiarly intense instincts, Miller had come to believe that Liedtke was a manipulative, cynical financier—hardly the honest, drawling wildcatter from the oil patch that he portrayed himself to be. The concrete evidence that Miller possessed to support his view was the difficulty Liedtke had with the Securities and Exchange Commission a decade before, during one of Pennzoil’s complex financial restructurings—Liedtke had settled the case by agreeing to forfeit his improper profits. But Judge Farris ruled that Liedtke’s past difficulties were not admissible in the present case. And so Miller had only his powerful instincts to follow during his cross examination. He believed that Liedtke’s bid for 20 percent of Getty Oil and his subsequent alliance with Gordon Getty painted a shadier portrait of the Pennzoil chairman than the one proffered by Jamail.
Jeffers and Terrell sensed Miller’s obsession with Liedtke; it was apparent in their former partner’s entire approach to the trial. In his asides to the jury during examinations, and in his voir dire and opening arguments, Miller portrayed Hugh Liedtke as a manipulative, cynical mastermind who planned to “use” Gordon Getty to acquire three-sevenths of Getty Oil’s assets at a bargain price. Miller had to tread carefully here, because it would be detrimental to his case if he cast Gordon, in Boone Pickens’ phrase, as the puppy to Hugh Liedtke’s sledgehammer—then Miller would have a hard time arguing that Gordon had sold his stock to Texaco freely and willingly. But Miller made his point: by insisting on the one-year “out” clause in his power-sharing deal with Gordon, Liedtke had belied his assertion that he was nobly trying to restore Gordon Getty to the throne of his family company. Miller emphasized the “hostile” aspects of Pennzoil’s 20 percent tender offer and the pressure it put on the museum and the Getty Oil board. Jeffers and Terrell came to believe that Miller’s obsession with Liedtke’s role in the case had a great deal to do with the former Baker & Botts partner’s desire to defeat his old firm and one of its most important clients—that Miller’s legendary devotion to winning had an extra dimension in this case. Miller himself did not see it that way; he said that the emphasis he placed on Liedtke derived solely from his view that Pennzoil’s chairman was the driving force behind the entire lawsuit.
Miller’s cross-examination of Liedtke went on for days. He pressed the Pennzoil chairman on every possible topic, from Liedtke’s motives in bidding for Getty Oil to his opinions about Petersen and McKinley, to his failure to sign a definitive agreement with the Getty Oil directors. But the more persistent the questioning, the more stubborn Liedtke became. Even if he was caught in an obvious and harmless error, Liedtke refused to yield to Miller.
“Well, George Getty died in 1973?” Miller asked at one point while questioning Liedtke about a New York Times article presented to the witness.
“No, George Getty did not die in 1973.” On this point, Liedtke was in fact mistaken. It hardly mattered; George Getty was not relevant to the case. But Liedtke would not back down.
“When did he die?” Miller asked.
“I don’t recall.”
“How do you know he didn’t die in 1973?”
“Well, because so many of the statements that the reporter’s made here, Mr. Miller, have been inaccurate. I don’t think I want to accept that one until you show me. If you show me that one, I’ll accept it. I would think Mr. Getty died in ’seventy-six, so probably George did die around that time, but Jack Roth was—”
“Around what time?”
“Around ’seventy-three or ’seventy-four, right in that time frame. But that does not change the fact that what I told you is accurate.”
On other occasions, Liedtke got the better of his questioner. When Miller pressed the witness as to why, having discovered that Texaco had taken Getty Oil away from him, Liedtke sent a threatening telegram to the Getty Oil board but did not communicate with Texaco.
“Here you are on the sixth of January,” Miller intoned dramatically. “You wake up and find out that somebody has stolen seven and a half billion dollars from you, and you don’t even get in touch with them.”
“Well, suppose I’m in the banking business and somebody’s stolen the Brink’s truck,” Liedtke replied. “Do I call the robbers or do I call the police?”
“Well, I’d have to say that’s a clever remark, no doubt about it,” Miller said, his tone so sarcastic that Jamail stood to object.
It was also during Dick Miller’s cross-examination of Hugh Liedtke that the Great Zipper Incident—or the Great Zipper Trick, depending on who one believes—took place. It is the goal of every trial lawyer to curry favor and sympathy with the jury, and so he must seize every opportunity to humanize himself to the panel. Dick Miller conceded afterward that he was long a student of trial lawyer trickery, but he insisted that the zipper incident was not deliberately concocted. What happened was this: Miller returned from a short break in his cross-examination of Hugh Liedtke with his fly wide open. He resumed his questioning. One of the jurors began to giggle. Another juror joined in, then another, until the box was nearly shaking from suppressed convulsions. Finally, Miller’s partner, Robert Brown, passed Miller a note that read, “Your pants are unzipped.”
“I am told I need to make some repairs,” Miller told the judge. “May I be excused momentarily?”
“You can make repairs anytime, Mr. Miller.”
When Miller returned, he smiled to the jury and said, “Well, I thought somebody would have spoken a little bit louder.”
It was the adamant and quite angrily held opinion of Joe Jamail that Dick Miller had come into court with his fly unzipped on purpose, in order to impress the jury with his vulnerable, likable humanity. Jamail was convinced of this because he himself had used the same trick on occasions in the past—in fact, Jamail went so far as to accuse Miller of stealing the idea from him. Miller seemed offended not so much by that accusation, which he denied, but by the failure of Pennzoil’s lawyers to laugh with him at the joke.
The man notably absent from Houston state courtroom 151 during the long months of the Pennzoil presentation was Gordon Getty. In the story told by Joe Jamail, Hugh Liedtke, Arthur Liman, and the rest, Gordon was a singularly important character. Indeed, he was central to Pennzoil’s sweeping themes about honor and morality. And yet he remained an essentially mysterious figure. It was said that Gordon wanted to run his father’s company, and that he had challenged the management practices of Sid Pet
ersen, particularly Getty Oil’s diversification into nonoil businesses. For this, Pennzoil’s attorneys argued, Gordon was treated with disdain, malevolence, and skulduggery by Petersen and his band of Wall Street retainers. Jamail referred again and again to the Getty Oil board meeting of November 1983, when the directors asked Gordon to leave the room while they voted to intervene in the family lawsuit Petersen and Getty’s outside counsel Bart Winokur had helped to organize. The moniker “Back Door Bart” was skillfully concocted to describe Winokur’s role. But Pennzoil’s descriptions of Gordon Getty and his relations with Getty Oil’s management were sharply limited. There was no detailed testimony about Gordon’s behavior in London in October 1983, for example, or about his dealings with Petersen and Winokur during the previous eighteen months. The Pennzoil attorneys skillfully portrayed Gordon as a victim—not helpless, not in any way immature, but rather, like Hugh Liedtke himself, unable to defeat the power and manipulations of Wall Street’s best and brightest lawyers and bankers.
Gordon testified only by videotaped deposition; he was beyond the subpoena range of the Texas state courts, and he was unwilling to voluntarily appear because of his entanglement in family litigation. So his presence at the trial, while critically important, was strangely distorted—he could be evaluated only by his television performance. On the days Gordon’s deposition was shown, the courtroom was packed; everyone wanted to see and hear the famous Getty scion. Gordon did not disappoint his audience. His distinctive character was evident even in this limited medium. He smiled and mugged for the camera hilariously. When asked about a specific exhibit, he would hold the paper up and shove it toward the camera like a comedic TV talk-show guest. In serious moments, his eyebrows knitted, his bony fingers draped across his cheek, and he seemed a portraiture of exaggerated concentration.
The substance of his testimony was crucial in one aspect. For Pennzoil to prove that Texaco had interfered with its contract, it had to convince the jury that Gordon had been forced to sell his family trust’s stock. On the evening of January 5, 1984, when Gordon was visited at the Pierre Hotel by John McKinley, Gordon and Pennzoil were partners. If Gordon testified that he had made his deal with Texaco out of his own free will, voluntarily and without coercion, then Pennzoil’s interference case would be severely undermined. It was important to Pennzoil that the “squeeze” scenario be credibly presented to the jury—that is, the jury had to believe that after forging a hasty alliance with Petersen for the company and Lipton for the museum, Texaco forced Gordon to sell out his 40 percent. In this scenario, if Gordon failed to sell, Texaco would squeeze him out at an unfavorable price—Gordon would be the juice. The question was, how did Gordon himself feel about the sale to Texaco? Facing the family lawsuit in California challenging his control of the Getty fortune, he had to be careful about not only what he said, but how he said it. At his videotaped deposition, John Jeffers, who was handling the questioning, had not been sure what Gordon’s answer would be.
“Would it be fair to say that when Texaco showed up at this meeting, its representatives, Mr. Lipton for the museum, and you found out that the museum was going to sell to Texaco, that you felt you had no choice but to do so?” Jeffers finally asked after a lengthy build-up.
“I think that’s a fair statement,” Gordon answered.
That was all Pennzoil needed from him. Gordon’s reply might on its face be ambiguous. (What did he mean, that he had no choice? Was he threatened? Did he ask what would happen if he chose not to sell? Why not?) But the opening was wide enough. Through it, Joe Jamail and his two partners pulled the basic premise of their client’s case. Together, Gordon and Pennzoil had been victimized by Texaco and its Wall Street proxies. Gordon’s treatment at the hands of Petersen, Winokur, and the rest, was morally outrageous. The way Pennzoil’s attorneys told it, it was a story as plain as black and white.
Indeed, that was how Gordon himself privately viewed his involvement in the affairs of Getty Oil over the company’s final eighteen months—during that entire time, he had done nothing wrong, he said. His trip to London in October 1983 was a waste of time, he conceded, and thus reflected a slight miscalculation on his part, but his behavior was at all times perfectly appropriate, even admirable. It was Gordon Getty’s self-image that was presented to the jury by Pennzoil in the Harris County Courthouse that summer of 1985. Whatever its relation to reality, it was the view of Gordon that best served Hugh Liedtke’s case. If a dissenting opinion was to be offered to the jurors, it would have to come from Texaco.
28
Of Sharks and Bear Hugs
After two months of testimony, Pennzoil rested its case against Texaco on Wednesday, September 18, 1985. The last witness, examined by Jamail, was Texaco chairman John McKinley, who had been subpoenaed by Pennzoil when he arrived in Houston to attend the voir dire jury selection in July. Texaco’s executives said later that they had anticipated this maneuver by Pennzoil’s lawyers and were prepared to have one or more of the company’s officers testify as “adverse” witnesses during Pennzoil’s affirmative case. But as the end-note to his presentation, Jamail’s cross-examination of McKinley, which immediately followed Hugh Liedtke’s testimony, dramatically emphasized the aggressive challenge of Pennzoil’s accusations.
It is a time-worn adage of jury trial lawyering that a defendant must be at least “even” with his opponent when the plaintiff rests his case. Otherwise, the theory goes, the defensive witnesses will have too much ground to make up with the jury. Another time-worn adage, which negates the utility of the first, is that trial lawyers see precisely what they want to see in the faces of the jury. So it was hardly surprising that when Pennzoil rested, Joe Jamail, Irv Terrell, and John Jeffers believed that they were way ahead, while Dick Miller and his partners thought that they were at least even, if not ahead themselves.
In theory, it is desirable for any defendant to put on as few witnesses as possible, so as to avoid damaging cross examination. Such a strategy is only possible if the defendant’s case has been effectively presented during cross-examination of the plaintiff’s witnesses. In Texaco’s case, this had not been accomplished by Miller and his partners—not because their cross-examinations were ineffective, but because the Pennzoil witnesses told a highly selective version of the events in New York in January 1984. Texaco had little choice but to call a parade of witnesses to the stand: Texaco executives who would testify that they had been invited into the friendly deal by Getty Oil’s Sid Petersen; Getty Oil directors who would testify that they had made no binding contract with Pennzoil; and Wall Street lawyers and bankers who would say that negotiations with Pennzoil had never been concluded because there were so many “open points” in the proposed joint takeover by Gordon and Hugh Liedtke.
Joe Jamail and his partners had expected all along that the defense’s first witness would be Al DeCrane, Texaco’s president. When they thought about their own case, the Pennzoil attorneys realized that its weakest aspect was the proof of Texaco’s deliberate “interference” with Pennzoil’s alleged contract. In depositions, the cool, cerebral DeCrane had testified confidently about the circumstances surrounding Texaco’s entrance into the deal and about his company’s friendly intentions toward Getty Oil management. Immaculately dressed, exuding the authority of his office, DeCrane was articulate and unflappable. He faced one difficulty as a witness: the embarrassing notes he had taken early on the morning of January 5 during his meeting with the First Boston bankers. But DeCrane handled the notes as well as anyone could expect. He emphasized that his scribblings reflected the opinions of Texaco’s new team of investment bankers that night, not the views of DeCrane, McKinley, or the Texaco directors. He said that Texaco would never have taken control of Getty Oil unless all the Getty interests, including Gordon, wanted to be rescued from Pennzoil by a white knight.
So when Texaco’s attorneys stood in the courtroom on the morning of Thursday, September 19, and called Bart Winokur to the stand, the Pennzoil lawyers were shocked. Win
okur had been the target of their most vitriolic rhetoric during the first half of the case. He was not a Texan. He had no legitimate connection to the oil business. He was just a lawyer—one of the storied Eastern lawyers at whose feet Jamail laid the blame for Pennzoil’s betrayal.
Later on, there would be a great deal of debate about the strategic decisions made by Dick Miller and his partners during the first weeks of September, as they prepared for the opening of Texaco’s defense. Miller would say that each decision reflected a consensus between himself, his partners, the lawyers from Texaco’s general counsel office, and even Texaco’s top executives. The Texaco executives, for their part, would say that they were merely following the expert advice of their lead trial counsel. Miller himself detested management by consensus; trial work to him was the ultimate test of individualism. When devising strategy, he pushed his client hard to follow his lead. Miller and his client shared an inclination to authoritarian decision-making; they were like magnets pushing against each other.
In White Plains, McKinley, DeCrane, and general counsel Weitzel were to some degree isolated from Miller by layers of hierarchy in the Texaco legal department, but they made their opinions clear nonetheless. In discussions about the order of defense witnesses, McKinley asked if it wouldn’t be best to lead with a witness from Texas—Getty Oil president Robert Miller, perhaps, or Getty Oil director and former chairman Harold Berg. But Miller was looking for a different kind of witness. He wanted someone who could provide the jury with an overview of Getty Oil’s predicament at the time of Pennzoil’s hostile tender offer, someone who could vividly describe the intense pressure the directors faced from Gordon and especially Hugh Liedtke. Through the summer, while Pennzoil’s case was presented, Miller told Sid Petersen that he would be Texaco’s first witness. Petersen would testify that Liedtke was in effect holding a gun to his head, that Liedtke and Gordon were trying to steal Getty Oil at an unfair price, and thus Texaco’s friendly rescue of the company was heroic. Then Miller changed his mind and settled on Winokur, who was more confident and articulate than Petersen—Winokur was an accomplished storyteller, and he could testify about a wider range of topics than Petersen, including the “open points” in Getty Oil’s negotiations with Pennzoil.
